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DYING WITHOUT A WILL

Article by listed attorneyNANIKA PRINSLOO

If you die without leaving a will or if you leave an invalid will, your heirs will inherit from you in terms of the Intestate Succession Act, Act 81 of 1987.

This Act applies to all South Africans – regardless of race or culture.

Intestate succession are the “rules” that are applied in terms of the above Act,  to determine who will inherit your assets if you leave no will.

This can mean that certain people may inherit from you that you maybe did not want to inherit from you.
 

RATHER LEAVE A WILL

It is therefore important to leave a will and anybody can (and should) have a will, no matter whether you are rich or poor. 

Consult with a professional person who has enough experience in wills and the tax laws to draft your will as soon as possible.

Death is a certainty but we do not know when it is our time to go.  This is not something you want to put off, so rather take care of this sensitive matter sooner rather than later. 

It is always better to know what your wishes were and leaving a will can make a difficult period for your family a bit easier to deal with if they know what you wanted.

Since this article is about not having a will, we refer you to our other article on drafing of wills on the website of Find a Professional.

SOME LEGAL TERMS

Here are some legal terms that you will come across regularly in the discussion of deceased estates and wills, both where there is a will and where there is not a will.

Deceased     –    the person who died

Devolve    –       to transfer assets or rights to somebody. The assets in your estate must be transferred to your beneficiaries. For example if you leave your car to your son, the car will “devolve” to him upon your death.

Estate      –      all your assets (property, monies, investments, clothes, vehicles etc.) as well as all debts.  In other words everything you leave behind.

Intestate     –     where there is no valid will

Testate     –      where there is a valid will

Heir      –       any person or institution or business or charity that inherits anything from you

Executor     –     somebody  named in your will (or appointed by the Master) to carry out the instructions contained in a will or to ensure that assets are dealt with in terms of the law

Per stirpes    –     If the deceased person had a child, but that child died before him/her, then that deceased child can be represented in the estate by his/her children.  See example below at point 2.

Spouse     –     the husband or the wife that the deceased was married to

IF YOU DO NOT HAVE A WILL OR IF YOUR WILL IS INVALID

You may have a will, but.it does not comply with the legal requirements, in which case it can be declared invalid.  Or, you may have left a will, but it was destroyed and a copy cannot be found.. Or you may not have left a will at all.

In all these instances your estate will devolve upon your beneficiaries in terms of the Intestate Succession Act.

It is also possible for a person to die partly intestate and partly testate. For example – if there is a will but portions of it are invalid;  or the person who made the will does not deal with some assets in the will but not all his/her assets.  Those assets that are dealt with will devolve testate (in terms of the will) and the balance of assets intestate.

It is very important to ensure that your will is valid, by making use of the services of a professional person who specialises in wills.

OTHER FACTS TO KNOW

This article does not refer to the costs involved in winding up an estate and which must be paid before the heirs can inherit.

If there is a shortfall on the costs, (where there are no real assets), then the heirs must pay the costs or the assets must be sold to pay for the costs.

All debts must be paid before the heirs can receive their assets.

Any asset that is not money, such as moveable and immovable property, as well as vehicles, must be valued by a sworn valuator to determine the value as at the date of your death.  Other assets will be valued differently.This is to inter alia determine the value of your estate for the purposes of estate duty. 

If all the assets are added up (in other words all moveable and immovable property; investments; savings, businesses and so forth), then the liabilities (debts, expenses, taxes, costs) must be deducted and that will leave a net estate.  It is the net estate that will be inherited by the heirs.

WHO WILL INHERIT FROM ME IF THERE IS NO WILL?

There are certain rules which determine who will inherit what and in what order in terms of intestate successan.

The rules given below act only as a guideline and is not an exhaustive list of different scenario’s and other legalities that may apply.  A professional person or the offices of the Master of the High Court must always rather be consulted so that the estate be reported and assets dealt with along the proper channels.

INTESTATE SUCCESSION – WHO INHERITS WHAT?

Intestate succession rules are, inter alia, the following:

 

  • RULE ONE:  The deceased leaves a spouse), but no children =  the spouse will inherit all the assets.  Where there is more than one wife (customary union), each wife will inherit in equal shares.   Where the parties were married IN community of property, one half of the estate belongs to the wife and one half to the husband.  So the remaining spouse will keep his/her half of the estate and will inherit the other half. (that is the half of the deceased).
  • RULE TWO: The deceased does not leave a spouse, but leaves children or grand children =  the children and/or the grand children will inherit.  
  • Children will inherit per stirpes. This means that if a person had a child that died before that person (in other words a grand child), then the grand child will inherit from the person.  Let’s use an example:

Mr Amos died without a will.  He was divorced 10 years ago and had 3 children. (Betty, Cindy and Dave) Sadly, Dave died 5 years before Mr Amos. Dave had one child, Susan and Susan is still alive.

When Mr Amos died, his estate will devolve as follows:

Betty will receive one-third;  Cindy will receive one third and Susan (Dave’s child) will receive one-third, because had Dave been alive, he would have inherited from Mr Amos and Susan therefore “represents” Dave.

(All children of the deceased will inherit:  whether such child was born within or out of wedlock; or was adopted or was born from a customary union.)

  • RULE THREE: The deceased leaves a spouse as well as children =  In this instance the spouse will inherit R125 000 or a child’s share, whichever is the biggest.

Once the spouse’s share has been deducted from the estate, the balance will go to the children in equal shares.  Again, per stirpes is allowed (see above).

Let’s use an example again:

Mr Amos died without a will.  He was married at the time of his death to Patsy and had 3 children (Betty, Cindy and Dave).  His estate was worth R250 000.

The first step is to divide the estate by how many children there are PLUS one  (i.o.w. the children PLUS the spouse). This is to first of all determine whether the wife’s share will be smaller or bigger than R125 000.  In this instance the estate must be divided in four. (wife plus 3 children) as follows:

R250 000 divided by four is R62,500-00 each.

Patsy (the wife) must get R125 000 OR a child’s portion. (whichever is the biggest).

Patsy will inherit R125 000 and not a child’s share of R62 500, as R125 000 is bigger.

So we need to do a further sum to determine how much each child must inherit:

The estate is worth R250 000.  Deduct the R125 000 that Patsy inherits, the balance of the estate is R125 000.

This amount must be inherited by the 3 children in equal shares.  So it is R125 000 divided by 3 so each child will inherit R41 666-67.

Let’s use an example where the estate is bigger:  Mr Amos’ estate is worth R600 000.

Patsy the wife must inherit R125 000 or a child’s share.

R600 000 divided by four is R150 000.

R150 000 is more than R125 000, so Patsy will inherit R150 000 and the 3 children will each inherit R150 000.

  • RULE FOUR: The deceased leaves no spouse or children (or grandchildren), but leaves both parents who are still alive =  the parents will inherit in equal shares.

If Mr Amos’ estate was worth R250 000, each parent will inherit R125 000.

  • RULE FIVE: The deceased leaves no spouse or children (or grandchildren), but leaves one parent who is still alive and his/her deceased parent left  children.  (In other words the deceased parent has left brothers and/or sisters and/or half-brothers and/or half-sisters of the deceased.) = the parent who is still alive will inherit one half, and the other half will devolve to the children of the parent who previously died.

For example:  Mr Amos died and was never married and had no children.  His mother is still alive but his father has died 12 years ago.  His father and mother had 4 children (i.o.w. the brothers and sisters of Mr Amos) and except for Mr Amos, who now died, the other 3 children are still alive.   

Mr Amos’ estate was worth R300 000 therefore:

His mother who is still alive will inherit R150 000.

His father’s share of R150 000 will be inherited by his 3 brother’s and sisters, so each will inherit R50 000.

  • RULE SIX: The deceased left no spouse or children (or grandchildren), but one parent is still alive and the deceased parent did not leave any children.  (In other words the deceased’s parents only had one child) = the parent who is still alive will inherit everything

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It can happen that both parents are dead but there are brothers and sisters; or where there are no children or parents alive, but this article is not going to get complicated.

This just gives you a background of intestate succession and how it is determined what must happen to your assets.

ESTATE DUTY AND CAPITAL GAINS TAX

Not to forget that not having a will or carefuly planning, can result in your estate paying high estate duties and capital gains tax.

Always consult with a professional, even if it is going to cost you a little more.

 

Article written by Nanika Prinsloo of Prinsloo  & Associate Attorneys.

www.empowerlaw.co.za